Avoid ‘in app’ purchases.

Did you know that every time you make a purchase of an app on your iDevice or using the AppStore icon on your Mac that you are giving 30% of the developer’s income to a corporation which systematically defrauds US taxpayers daily?

Yes, that’s the fee Apple extracts when you do so. The ‘sell’ is that it reimburses AAPL for running the AppStore (a bigger mess you will not find on the web) and that they are making your life easy. Trust us, we’re Apple and your well being is our sole interest – when we are not avoiding paying taxes on the $17 billion in cash we have stashed offshore, that is and have largely avoided paying any corporation taxes on our vast annual income.

Sure, you could still sell your app from your own web site, but the price had to be the same and no reference to your web site was permitted in the AppStore version of your app.

It doesn’t take a moment’s thought to realize that magazines, newspapers and small software writers could not possibly make a profit after Apple extracted its 30%. So not only was this policy ruinous to these vendors it actually hurts Apple. It’s never a good idea to put your providers out of business.

Well, in the good, old fashioned English public school I attended, we really disliked bullies. It was deeply inculcated in pupils that bullying is just not on. So well was this message conveyed that when there was a rare case of playground bullying, you could bet that the perpetrator would be approached by four of the burlier members of the rugby team, marched to the men’s room, his head stuck down the porcelain bowl and the flush cord pulled. What it lacked in subtlety it more than made up for in effectiveness.

Appropriately enough it took the British to put a stop to Apple’s bullying ways. Pearson, the publisher of the estimable Financial Times, just stuck the fruit company’s greedy head down the proverbial toilet. And flushed.

You can bet that the FT will shortly discontinue its presence in Apple’s AppStore all together. I changed immediately to the new app and can confirm it works just fine. And there’s more content too. Plus where else do you go for objective financial news?

At the recent WWDC hoopla (wow! Lion has more bells and whistles no one needs and screw you if you use Rosetta apps ….) Apple made much of how the AppStore was selling millions/billions/trillions of apps, or some such idiocy. Yes, and their growing software distribution monopoly nets them 30% a pop.

So here is my suggestion. By all means search for photography and magazine apps in the AppStore for your Mac. But when you find something you like, hop over to the developer’s/publisher’s web site and buy directly from them. (Sadly, you have no choice in the matter with iDevice apps, unless you elect to hack your iDevice). You put that 30% in the developers’ pockets, where it is sorely needed. You certainly don’t need to send it to a US corporation which has paid negligible corporation taxes for years and has $70 billion in the bank as a result. Yes, a big chunk of that is your money, US taxpayers.

Let Dr. P. put Apple’s ways in perspective for you.

Here’s the Income tax footnote from their last annual SEC filing:

Forget all that ‘deferred tax’ baloney. Those are not cash payments. So total taxes AAPL paid in 2010 were $3.1bn on net income of $18.5bn or 16.8%, compared to a federal corporation tax rate of 35%, or more than twice the rate AAPL paid. Then add in the fact that somehow Apple makes the claim that less than half of its sales were in the US and the most they will have paid in US taxes is maybe $1.5bn.

And you want them to extort developers and publishers for 30%? I didn’t think so.

Developers? Offer reduced function apps through the AppStore and get the word out that the real thing can be had from your web site. Stop feeding the bully. And make sure your AppStore version flashes a sign to your full featured app, just the way the FT is doing it. Apple has not had the brazen cheek to try and stop that.